While most Canadian oil and gas producers remain intent on maintaining output, oil services companies are signaling a downturn next year.

The Canadian Association of Oilwell Drilling Contractors (CAODC) expects a 10% decline in drilling activity in 2015 compared to this year, based on a West Texas Intermediate price of US$85.

“If we have additional erosion in crude prices, and if we have a negative response from the [liquefied natural gas] industry, the forecast will be have to be adjusted in the downward direction,” Mark Scholz, president of the CAODC said in an interview.

The oilfield services industry is expected to end its best year in terms of completed wells, but that rally is likely to end in 2015 if commodity prices continues to tank.

Oil prices have fallen 30% from a high of about US$115 per barrel this year, but the industry has remained calm with few revisions to capital expenditure for next year.

A number of uncertainties are playing on the industry’s mind, however, especially as pipeline access remains elusive, noted Mr. Scholz, whose trade association represents more than 100 drilling and service rig contractors across the country.

“Let’s not kid ourselves. If we we don’t get pipeline infrastructure built in this country, we are going to be in lot of trouble.”

The wild card in the forecast is the LNG industry, which could see a tripling of drilling activity in British Columbia if major industry players decide to proceed with their proposed plans for export facilities in the province.

“At this stage I don’t think we have much certainty or clarity on the industry’s investment optimism. Investors want to make sure of a fair return on their investment, and if there is uncertainty at play, activity can dry up very quickly.”

CAODC anticipates rig utilization in 2015 to average 61% in the first quarter, 19% in the second quarter, 41% in the third quarter and 46% in the fourth quarter, which is typical of the activity cycle.